Last week, in Digital Control v. CMW, the CAFC grappled with the issue of an inequitable conduct summary judgment, considering inequitable conduct relying upon findings of fact: materiality & intent. In that case, the facts were not clear-cut, and so the appeals court remanded the case for more factual determination. In Ferring v. Barr, by contrast, the evidence was considered clear-cut and irrefutable.

Ferring in prosecution struggled to get the patent, and repeatedly used declarations by supposedly independent scientists to argue their case. But there was no arms-length relationship between the declarers and inventor Vilhardt.

In sum, four of the five declarations submitted to the PTO in 1990 were written by scientists who had been employed or had received research funds from Ferring, and Vilhardt participated in the drafting of two of the four declarations submitted by non-inventors. The examiners were not otherwise made aware of the Ferring connections. After these declarations were submitted, the examiners allowed the previously rejected claims, and the ‘398 patent issued on September 10, 1991. The PTO did not provide any explanation for its allowance.

Barr got into the act by seeking to market a generic version of the drug, declaring to the FDA '398's invalidity, and thus setting up the lawsuit instigated by patent-holder Ferring.

In July 2002, Barr filed an Abbreviated New Drug Application (“ANDA”) with the Food and Drug Administration, seeking approval to market a generic version of the compound at issue. In connection with its ANDA, Barr filed a so-called “paragraph IV certification,” which is a statement that any relevant patents to the generic compound are either invalid or will not be infringed. 21 U.S.C. § 355(j)(2)(A)(vii)(IV) (2000). Barr’s paragraph IV certification claimed that the ‘398 patent was invalid. In response, Ferring filed an infringement action against Barr pursuant to 35 U.S.C. § 271(e)(2). Barr moved for summary judgment based on inequitable conduct and non-infringement. The district court granted summary judgment to Barr on both grounds.

On the issue of inequitable conduct, the district court found:

The undisputed evidence in this case supports the finding of inequitable conduct by the patentee and its agents and the grant of summary judgment. The reluctance of the PTO to issue the ‘398 patent was evident. Each affidavit submitted in support of its issuance was thus highly material to the prosecution history. That three of the challenged declarations were submitted after several iterations of rejected attempts to obtain the patent’s issuance speaks loudly as to motive and intent. While credibility determinations from a courtroom observation may at times be necessary on the issue of intent, here, the entire record presents clear and convincing evidence of an intent to mislead the examiners, even viewing the evidence, as it must be viewed, in the light most favorable to Plaintiff. The submission of the Czernichow and Robinson declarations, and to a lesser extent that of Barth, support a finding of intent to mislead the PTO.

J.A. at 18. The court specifically found that “it must have been clear to Dr. Vilhardt at the preliminary meeting with the examiner that a non-inventor affidavit was sought for purposes of obtaining objective evidence that the invention was not anticipated by the prior art or obvious.” J.A. 16 (emphasis added).

Here is the CAFC backdrop for a finding of inequitable conduct, with a reminder that a summary judgment ruling of inequitable conduct is unusual -

“Inequitable conduct occurs when a patentee breaches his or her duty to the PTO of ‘candor, good faith, and honesty.’” Warner-Lambert Co. v.Teva Pharms. USA, Inc., 418 F.3d 1326, 1342 (Fed. Cir. 2005) (quoting Mollins PLC v. Textron, Inc., 48 F.3d 1172, 1178 (Fed. Cir. 1995)). While inequitable conduct includes affirmative misrepresentations of material facts, it also arises when the patentee fails to disclose material information to the PTO. Id.; Pharmacia Corp. v. Par Pharm., Inc., 417 F.3d 1369, 1373 (Fed. Cir. 2005). “The inequitable conduct analysis is performed in two steps comprising ‘first, a determination of whether the withheld reference meets a threshold level of materiality and intent to mislead, and second, a weighing of the materiality and intent in light of all the circumstances to determine whether the applicant’s conduct is so culpable that the patent should be held unenforceable.’” Dayco Prods., Inc. v. Total Containment, Inc., 329 F.3d 1358, 1362-63 (Fed. Cir. 2003) (quoting Purdue Pharma L.P. v Boehringer Ingelheim GMBH, 237 F.3d 1359, 1366 (Fed. Cir. 2001)). The predicate facts must be proven by clear and convincing evidence. Id. at 1362. “While our precedent urges caution in the grant of summary judgment respecting a defense of inequitable conduct, summary judgment is not foreclosed.” Paragon Podiatry Lab., Inc. v. KLM Labs., Inc., 984 F.2d 1182, 1190 (Fed. Cir. 1993); see also Digital Control Inc. v. The Charles Machine Works, -- F.3d -- , slip op. at 6 (Fed. Cir. 2006) (“Determining at summary judgment that a patent is unenforceable for inequitable conduct is permissible, but uncommon.”).

Materiality

For patent applications that have been prosecuted prior to 1992, we have held that “[i]nformation is deemed material if there is a substantial likelihood that a reasonable examiner would have considered the information important in deciding whether to allow the application to issue as a patent.” Li Second Family L.P. v. Toshiba Corp., 231 F.3d 1373, 1379 (Fed. Cir. 2000) (quoting 37 C.F.R. § 1.56 (1989)); Syntex (U.S.A.) LLC v. Apotex, Inc., 407 F.3d 1371, 1384 (Fed. Cir. 2005).6 We have made clear that examiners have broad authority to request information that they deem relevant to the issue of patentability. Star Fruits S.N.C. v. United States, 393 F.3d 1277, 1283 (Fed. Cir. 2005). In response to requests from examiners, applicants frequently submit supporting declarations. Given the ex parte nature of proceedings before the PTO, it is especially important that the examiner has all the information needed to determine whether and to what extent he should rely on declarations presented by the applicant.

Evidence provided in support of invention is presumed objective, as witnessed by a lack of relationship between the inventor and declarer. A taint hangs over any declaration made on a friendly or self-serving basis.

The general law of evidence has long recognized that the testimony of any witness may be rendered suspect by a past relationship with a party.7 The pertinent rules for PTO examiners have specifically recognized this evidentiary principle, explaining: “Affidavits or declarations should be scrutinized closely and the facts presented weighed with care. The affiant’s or declarant’s interest is a factor which may be considered, but the affidavit or declaration cannot be disregarded solely for that reason.” J.A. at 5415 (The Manual of Patent Examining Procedure). As appellants concede, we have previously held that a declarant’s prior relationships with the patent applicant may be material, and that failure to disclose such relationships to the examiner may constitute inequitable conduct. Refac Int’l, Ltd. v. Lotus Dev. Corp., 81 F.3d 1576, 1581-82 (Fed. Cir. 1996); Paragon, 984 F.2d at 1191-92.

In Refac, the PTO examiner rejected an application because it did not sufficiently enable one skilled in the art to make the invention. 81 F.3d at 1578. The examiner stated that a supporting affidavit by the co-inventor had very little probative value and was “self serving.” Id. In response, the inventors suggested that they submit affidavits from people “other than the inventors” to support the sufficiency of the disclosure. Id. They then submitted affidavits from three individuals but failed to disclose that at least one of the individuals had worked for the inventors’ company for a short eight-week period and was already familiar with the invention. Id. at 1580-81. We affirmed the district court’s finding that this omission was material and supported a finding of inequitable conduct. Id. at 1581-82. In so doing, we found it particularly important that “[a]n examiner must be able to evaluate information in an affidavit in context, giving it the proper weight . . . .” Id. at 1583.

In Paragon, the examiner requested “disinterested third party” declarations and when the inventors submitted the declarations, they failed to disclose that one of the declarants owned stock in the assignee’s company at the time of his declaration and had previously been a consultant for the company. 984 F.2d at 1191. The declarant also averred in his declaration that he had not been “employed” by the assignee’s company. Id. We decided not to “quibble about whether a ‘consultant’ is or is not ‘employed’ by a company,” finding instead that the declarant was not “a ‘disinterested’ party in any recognized sense of the word.” Id. at 1192. We then affirmed a finding of inequitable conduct based on omissions regarding the declarant’s affiliations. Id.

Here, appellants argue that the Ferring affiliations of declarants Czernichow, Robinson, and Barth, were immaterial as a matter of law because (1) those affiliations supposedly did not bear directly on the critical assertion that each made in his declaration, meaning that the relationships were not the source of the information in the declarations, and (2) the declarants did not have a direct financial stake in the success of the patent.

Our jurisprudence does not suggest such a narrow view of materiality. A witness’s interest is always pertinent to his credibility and to the weight to be given to his testimony, and relevant interests are not limited to direct financial interests. Under Refac and Paragon, a declarant’s past relationships with the applicant are material if (1) the declarant’s views on the underlying issue are material and (2) the past relationship to the applicant was a significant one. Here we think that each of these requirements was satisfied on the summary judgment record.

Finally, on the issue of materiality, appellants argue that they could have, at trial, presented evidence to raise a fact issue concerning either the significance of the experts’ views or the significance of the past relationships. But the appellants presented no such contrary evidence in response to the summary judgment motion. As we discuss below in connection with the issue of intent, the appellants cannot raise a genuine issue of material fact by speculating as to what evidence might have been introduced at trial.

Intent

Even if an omission is found to be material, the omission must also be found to have been made with the intent to deceive. “[M]ateriality does not presume intent, which is a separate and essential component of inequitable conduct.” GFI, Inc., 265 F.3d at 1274 (quoting Manville Sales Corp. v. Paramount Sys., Inc., 917 F.2d 544, 552 (Fed. Cir. 1990)). However, “[i]ntent need not, and rarely can, be proven by direct evidence.” Merck & Co., Inc. v. Danbury Pharmacal, Inc., 873 F.2d 1418, 1422 (Fed. Cir. 1989). We recently held in Bruno Indep. Living Aids, Inc. v. Acron Mobility Servs., Ltd., 394 F.3d 1348 (Fed. Cir. 2005), that “in the absence of a credible explanation, intent to deceive is generally inferred from the facts and circumstances surrounding a knowing failure to disclose material information.” Id. at 1354 (emphasis added) (finding that where the patentee “has not proffered a credible explanation for the nondisclosure . . . an inference of deceptive intent may fairly be drawn in the absence of such an explanation”). Similarly, in Critikon, Inc. v. Becton Dickinson Vascular Access, Inc., 120 F.3d 1253 (Fed. Cir. 1997), we made it clear that “a patentee facing a high level of materiality and clear proof that it knew or should have known of that materiality, can expect to find it difficult to establish ‘subjective good faith’ sufficient to prevent the drawing of an inference of intent to mislead.” Id. at 1257.11 Contrary to Ferring’s argument, the question of intent is directed to the applicant’s intent, not to the intent of the declarants. Thus, that the declarants may have had no intent to deceive is entirely irrelevant. The question is whether the applicant (here Vilhardt) had such an intent.

We need not in this case attempt to lay down a general rule as to when intent may be or must be inferred from the withholding of material information by an applicant. Suffice it to say that we have recognized, in cases such as Paragon, that summary judgment is appropriate on the issue of intent if there has been a failure to supply highly material information and if the summary judgment record establishes that (1) the applicant knew of the information; (2) the applicant knew or should have known of the materiality of the information; and (3) the applicant has not provided a credible explanation for the withholding. See Bruno Indep. Living Aids, 394 F.3d at 1354; Critikon, Inc., 120 F.3d at 1257. Here, all three conditions are satisfied.

The Balancing Act

Having found that there were no genuine factual disputes with respect to the issues of materiality and intent, we turn to the question whether the court properly weighed materiality together with intent to determine that the conduct was “inequitable.”

[T]here were multiple omissions over a long period of time—a fact that heightens the seriousness of the conduct.

In coming to this conclusion, we fully recognize that inventors often consult their colleagues or other persons skilled in the art whom they have met during the course of their professional life. Accordingly, when an inventor is asked to provide supportive declarations to the PTO, it may be completely natural for the inventor to recommend, and even contact, his own colleagues or people who are, or who have been, affiliated with his employer and to submit declarations from such people. Nothing in this opinion should be read as discouraging such practice. Rather, at least where the objectivity of the declarant is an issue in the prosecution, the inventor must disclose the known relationships and affiliations of the declarants so that those interests can be considered in weighing the declarations. This is not an onerous burden to place on any applicant.